(Read more on the industrial market.)

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STOCKHOLM-Schenker Logistics has inked a 269,000-sf lease for anew distribution facility. ProLogis will develop the industrialarea of Vastra Arlandastad in city of Sigtuna, near theStockholm-Arlanda International Airport.

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Schenker, which will occupy 100% of the build-to-suit building,is consolidating its operations in Stockholm and will use the newfacility as its primary distribution center for the Stockholmregion. The building, which is scheduled to begin construction inearly 2008, is expandable up to 366,000 sf.

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Asgeir Torfason, market officer for the Nordic Region forProLogis, declined to provide development costs or asking rates forthe facility, but did tell GlobeSt.com that the market average forsuch as facility is 500 Swedish kronor or $79 per square meters.Land for the new park, to be called ProLogis Park StockholmArlanda, was acquired earlier this month.

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ProLogis established an on-the-ground presence in Sweden in2005. It now operates seven buildings in Sweden, two of which areat the maximum height and the others at heights that are fairlyclose.

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Schenker's lease, Torfason adds--or rather the company'smotivations behind it--is emblematic of much of the business thatProLogis is seeing in this market.

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Demand for larger and new industrial space is growing asshifting Pan-European distribution patterns are placing Sweden inthe role of regional distribution hub. This has resulted in greaterdemand for modern facilities both on a build-to-suit and inventorybasis, he says.

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Also, there is a growing demand for facilities built to thelatest standards. ProLogis' operations here are drawing in tenantsin some part because of its buildings' clear height, many of whichare 10 meters high and two of which are 11.7 meters high--themaximum allowed for a single sprinkler system. The latter, in fact,is somewhat rare for Sweden, Torfason says. But tenants areclamoring for such space, he says, because it allows them toconsolidate in one large modern facility, thereby streamliningtheir logistics and warehouse operations. The next month, he adds,the company will be announcing more deals similar to the Schenkerlease.

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